Stocks may churn throughout the summer

Stock prices have roared back strongly through the second quarter, as investors grew increasingly optimistic over prospects for economic reopening and the unprecedented monetary policy support that provided a strong tailwind for equities. At this point, however, stocks are looking somewhat richly valued and we think investors may be looking past some key risks. We think long-term prospects for stocks remain compelling, but markets may be in for prolonged volatility, a possible setback and ongoing churning over the next few months.